Intel CEO Says Chip Scarcity Will Final Past 2022

Speaking to the Washington Post, Pat Gelsinger, CEO of Intel, said it would take "a few years" for the company to rebuild semiconductor capacity. The global shortage of semiconductors has plagued several industries, causing bottlenecks in manufacturing equipment, medical equipment, and commercial computers. Intel is targeting the auto industry first as it will be rebuilt over the next few years.

Reuters reports that Intel plans to focus manufacturing on automakers over the next six to nine months and rebuild the supply chains that were disrupted by the coronavirus pandemic. "That in no way speaks to everything," said Gelsinger, "but every little bit helps." Intel's push is part of a larger goal to expand manufacturing in the US and remove the industry bottlenecks at manufacturers like TSMC and Samsung that contributed to the shortage.

Intel last month announced plans to invest $ 20 billion to build two new factories in Arizona. According to Intel, the company's goal is to "become a major provider of foundry capacity in the US and Europe to serve customers worldwide". The US is responsible for about 12% of the world's semiconductor manufacturing. Gelsinger wants to increase the market share to over 30%.

Intel CEO Pat Gelsinger Walden Kirsch / Intel Corporation

The Biden government tabled a plan to spend $ 50 billion on subsidizing semiconductor manufacturing, which could boost domestic production. According to Gelsinger, the government and industry must invest more overall. Alongside Tom Caulfield of GlobalFoundries (a California-based semiconductor foundry), Gelsinger campaigned for the US to become more aggressive in order to capture a third of the global market.

While an increase in manufacturing would certainly be profitable for Intel, the new factories will not be built specifically for the company's chips. As one of the last companies to develop and manufacture its own chips, Intel plans to open the factory doors to external companies.

However, these plans are far away. Even the most optimistic estimates suggest that the semiconductor shortage will not subside until 2022 and the world market may not return to normal until 2023. According to Gelsinger, Intel has already worked with component suppliers to ramp up production in its factories. Who these suppliers are and where the production takes place remains a mystery.

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